FEC Head: Ruling Could Limit Soft Money Even More

WASHINGTON – New partisan groups collecting the big donations that the national party committees can no longer accept may be in for a surprise as they gear up for next year's elections.

The Federal Election Commission's (search) incoming chairman, Republican Bradley Smith (search), said a Supreme Court ruling upholding the nation's new campaign finance law may limit the activities of such groups far more than they now think. He said the law may also require them to disclose their finances and spending to the FEC.

"If so, it's a huge issue. And it means there are a lot of groups already out there that would have accepted contributions beyond their limits," Smith said in an interview with The Associated Press.

Smith, elected Thursday to take over as chairman Jan. 1, said the FEC will formally decide the issue early next year when it considers a request from a new Republican group on whether it is free to spend unlimited amounts of money promoting President Bush in next year's elections.

Several Democratic groups already are raising millions they hope to spend against Bush next year.

At issue is last week's Supreme Court ruling that upheld a provision of the law banning the national political parties from raising corporate, union and unlimited donations known as soft money. The law also bans outside groups from using corporate or union money to pay for ads mentioning candidates close to elections.

Democrats, however, believe the new law provides an exemption for special tax-exempt political groups, known as 527s, and they have formed several of them to keep collecting hefty checks. The goal is to use the groups to help Democrats better compete with Republicans, who enjoy a significant edge in raising small contributions allowed under the law.

Smith's word of caution surprised a lawyer representing three of the new Democratic groups. "I think it would be a dramatic change in the law that can only come from Congress to do that, and that has not occurred," said attorney Laurence E. Gold.

Smith said that while he hasn't formally made up his mind, he believes the court's ruling may require the FEC to treat the new groups just like regulated political committees. As such, they would be limited to accepting no more than $5,000 in donations from each individual, and be banned from taking corporate or union money.

It also would require them to disclose their finances and spending to the FEC.

Smith said the high court ruling seems to eliminate the court's previous "express advocacy" standard, which meant the FEC could regulate groups that spent money expressly calling for a candidate's election or defeat.

If the FEC decides that the Supreme Court ruling expands its ability to regulate and limit election activities, the new groups could be forced to return the big checks they have collected.

Paul Sanford of the nonpartisan Center for Responsive Politics (search), a campaign watchdog organization, said he agrees with Smith that the groups could be subjected to the limits.